NHS doctors face some of the most complex tax situations in the UK. Between the NHS Pension Scheme, locum work, the Annual Allowance taper, and the £100K Personal Allowance trap, it is easy to end up with unexpected tax bills running into thousands. This guide covers the key issues for 2026/27.
The Annual Allowance and the NHS Pension
The Annual Allowance for pension contributions is £60,000 per year. However, for high earners the Tapered Annual Allowance reduces this: for every £2 of "adjusted income" above £260,000, the allowance falls by £1, down to a minimum of £10,000.
NHS Pension contributions are calculated on pensionable pay and can be substantial — often £30,000–£50,000/year for senior consultants when you include the employer contribution (which counts towards the Annual Allowance). Breaching the allowance triggers an Annual Allowance Charge taxed at your marginal rate.
Scheme Pays
If you breach the Annual Allowance, you can ask the NHS Pension Scheme to pay the tax charge on your behalf ("Scheme Pays"). This reduces your future pension benefits but avoids an immediate cash payment. You must notify the scheme by 31 July following the Self-Assessment deadline.
Locum income
Locum shifts are typically self-employed income (unless paid through an agency on PAYE). If self-employed:
- Register for Self-Assessment
- Deduct allowable expenses (travel, indemnity insurance, GMC fees, courses)
- Pay Class 2 and Class 4 NI on profits
- Locum income is added to your NHS salary for tax band purposes
Many doctors earning £80,000+ from their NHS role find locum income is taxed at 40% or higher from the first pound — because their salary has already used up the basic rate band.
The £100K trap for doctors
Consultants and senior GPs frequently earn between £100,000 and £125,140. The Personal Allowance taper creates an effective 60% rate in this zone. Pension contributions (including salary sacrifice) can bring adjusted net income below £100,000 and restore the full allowance. See our £100K tax trap guide for the full breakdown.
Allowable expenses for doctors
- GMC registration fees
- Medical defence organisation fees (MDU, MPS, MDDUS)
- Royal College membership fees
- BMA subscription
- Professional courses and exams (if related to current role)
- Specialist clothing (scrubs, if not provided)
These can be claimed via Self-Assessment or by adjusting your tax code (form P87).
Estimate your total tax position
Use the income tax calculator to input your total income (NHS salary + locum earnings) and see your combined tax liability. The pension tax relief calculator can help model how additional voluntary contributions affect your bill.